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RAS AL KHAIMAH / WAM
The shareholders of Gulf Pharmaceutical Industries (Julphar) approved the company’s plan to restructure its capital at its annual general assembly (AGM).
Julphar’s Board of Directors had recommended the restructuring of capital in January, and called for the AGM to pass a special resolution for a capital reduction followed by a capital increase by way of rights issue.
The plan aims to “strengthen the company’s capital position and improve its debt profile”, the Gulf Pharmaceutical Industries said in a statement, adding that the rights issue will increase the share capital of the company by up to AED500 million by issuing new shares with a nominal value of AED1, after cancelling the company’s losses.
Julphar’s capital restructuring is subject to the final approval of the Securities and Commodities Authority.
Following comprehensive changes to the board and the executive management team in 2019, Julphar said it is executing a comprehensive transformation programme, encompassing market re-entry plans for Saudi Arabia and Kuwait, an expansion of its product portfolio, investments in quality control systems, and the implementation of a cost optimisation initiative with a view to returning to profitability and rebuilding its leading market position.
In 2019, Julphar’s operations were adversely impacted by a temporary suspension of the export of its products to Saudi Arabia, Kuwait and Oman, in addition to unfavourable market conditions.
Exports to Oman were resumed in March this year, and the company is awaiting final results from inspections conducted by the Gulf Health Council and SFDA and expects the temporary ban in the remaining two markets to be lifted in due course.
Commenting on the capital restructuring, Dr. Essam Farouk, Chief Executive Officer at Julphar, said, “We thank our shareholders for their vote in favour of this capital restructuring, which is reflective of their continued trust and their continuous support of our pledge to deliver high-quality, safe and effective products to our customers.
“The capital restructuring will mark a milestone in the transformation that is underway at Julphar, which has the clear objective to restore our position as a leading regional pharmaceutical company within three years.”